Genesis’s amended plan draws objections from multiple interested parties

Chicago, Nov. 1 – Genesis Global Holdco, LLC’s amended Chapter 11 plan drew objections and limited objections from multiple involved parties, according to many filings with the U.S. Bankruptcy Court for the District of Delaware.

Starting with the ad hoc group of lenders, the group recommends denial of approval of the disclosure statement, mostly pointing to the need for additional information.

The ad hoc group starts by saying that it has concluded that any consensual path forward between the group and the debtors has proved unreachable.

The ad hoc group still supports the filing and confirmation of a “no deal” plan.

However, dealing with the current disclosure statement, the group notes that it is devoid of adequate information.

The amended plan, for instance, is missing a detailing of the distribution of the debtors’ cash and digital assets to creditors.

The official committee of unsecured creditors entered a reservation of rights, putting forth a more hopeful tone that it can continue to work with the ad hoc group of lenders and the debtors on key issues with respect to both the amended plan and the amended disclosure statement.

However, if the issues cannot be resolved through discussion, the committee reserves its right to raise additional issues with the approval motion at the hearing.

SOF International, LLC, a member of the official committee of unsecured creditors, submitted its own objection to the proposed disclosure statement on similar lines as the objection from the committee.

Gemini Trust Co., LLC found the plan patently unconfirmable.

The entity argued that the amended plan funneled hundreds of millions of dollars of value away from disenfranchised Gemini lenders for the benefit of institutional creditors.

Also, the amended plan did not explain the distributions and lacked adequate information.

Further, Gemini lenders have been placed in the amended plan in one class to disenfranchise them, the entity argued.

Additionally, there is not enough time to solicit and tabulate 232,000 votes from Gemini lenders.

There were also limited objections filed from Digital Currency Group, Inc., Foundry Digital LLC, Three Arrows Capital, Ltd., from the court-appointed co-lead plaintiffs and from Valour Inc.

Amended plan terms

Previously reported, the amended plan contemplates that holders of allowed general unsecured claims will receive a combination of the debtors’ cash, digital assets, avoidance recoveries (including proceeds from any and all causes of action or other claims against any of the DCG parties or Gemini parties), proceeds resulting from the sale of assets of the wind-down debtors, and proceeds from obligations of the DCG parties, including the partial repayment agreement, the $630 million in DCG loans, the $1.1 billion DCG note, tax receivables, and any and all causes of action or other claims against any of the DCG parties, including the proceeds from any settlements thereof.

The plan also provides for payment in full of all allowed administrative expense claims, priority tax claims, other priority claims and professional fee claims.

The plan will provide for customary releases, but it will not release any DCG parties or any former officers and directors of the debtors who did not serve as officers or directors of the debtors as of the petition date. Current officers and directors who served as such as of the petition date will be released only with the written consent of a special committee prior to the effective date.

Holders of allowed claims denominated in digital assets will receive in-kind distributions in the form of the digital asset in which their claims are denominated.

All distributions on account of allowed Gemini lender claims will be made to a distribution agent and held in trust in a segregated account for the benefit of the holders.

Genesis Global is a New York-based cryptocurrency lender that filed bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Jan. 19, 2023 under Chapter 11 case number 23-10063.

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